The most recent COVID relief bill was signed by President Biden yesterday. In one year’s time our government (two different administrations) has passed about $6 trillion worth of stimulus. We’re so used to “trillions” being thrown around I believe we’ve become numb to the mind-blowing magnitude of it all so I’ll try to put it in perspective:
- $6,000,000,000,000 (that’s twelve zeros) divided by a population of 330 million is about $18,000 for every man, woman and child.
- The average household is about 2.5 people (130 million households) so $6 trillion of stimulus is about $46,000 for every household on average. For our family of five, it’s about $90,000 (no, we didn’t get any of that).
Continue reading “Putting $6 Trillion “Stimulus” in Perspective”
At the end of last year Congress passed the SECURE Act, which had a pretty significant impact on individual retirement accounts. The one change I want to focus on in this brief letter is the impact of the new law on Required Minimum Distributions (RMDs). Continue reading “SECURE Act: Changes to Required Minimum Distributions (RMDs)”
There are a few folks I’ve been speaking with over the last couple months that are interested in working with me but are hesitant to move forward because they don’t want to sell any investments. This is largely due to the large capital gains they have embedded in some of their long-held investment positions.
Before I discuss the potential problem with this line of thinking let me express that (1) I am very sensitive to taxes when managing portfolios and (2) I do manage around concentrated positions with large capital gains when appropriate using a variety of methods (e.g. options strategies).
The problem with this line of thinking is that you’re letting the tax tail wag the investment dog. The best way to illustrate what I’m talking about is with a simple example. Continue reading “Don’t Let The Tax Tail Wag The Investment Dog”
First, I hope you have a wonderful weekend!
Just dropping a quick line this afternoon as I saw an article in the Wall Street Journal today titled, “Number of Americans Caught Underpaying Some Taxes Surges 40%” that made me think of a point I’ve often made in private.
Continue reading “Tax Withholding Makes Taxpayers More Agreeable To Higher Taxes”
As hard as it might be to believe, income tax rates in this country have at times exceeded 90%. And, perhaps even more surprisingly, the country was relatively prosperous during those same periods. Not so surprisingly, the high tax rates are often attributed with the widespread national prosperity. But we know correlation does not equal causation. Check out the tweet below for just one such recent example.
Continue reading “Confiscation Leads to Prosperity?”